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NewsGlobe: Currents
BBWF: IPTV and I-TV on potential collision course, says IBM
Battles over “net neutrality” and advertising revenues could occur
by Iain Morris
IPTV could be on a collision course with the Internet TV
services being offered by the likes of Joost and Babelgum,
according to a senior executive at IBM.
Speaking at the Broadband World Forum in Berlin yesterday,
Rob van den Dam, the European telecom leader for IBM, said
there are a number of potential collision points between
telcos offering IPTV to their customers and Internet firms
launching video-based websites.
One issue is distribution, which has already sparked
arguments in the U.S. about so-called “net neutrality” —
whether telcos should be free to filter traffic travelling over
their networks and make Internet companies pay for a
prioritized service.
In the States, companies like Google and Yahoo! have
reacted angrily to suggestions they should pay telcos for
transport, saying their customers already generate vast
amounts of revenue for the telcos.
Telcos appear divided on the issue. Earlier this week, Vicente
San Miguel, the CTO of Spanish incumbent Telefónica, struck
a conciliatory note when he said broadband would not have
been such a tremendous success without the presence of
companies like Google.
But as telcos ramp up their bandwidth-guzzling IPTV offers,
calls for a more discriminatory approach to traffic could get
louder.
Fight for advertising revenue
Telcos and Internet firms might also find themselves battling
for new sources of advertising revenue, said van den Dam.
That battle could intensify if the IPTV providers find that pay-
per-view and subscription-based revenues are unsustainable.
“In many countries customers will not expect to pay for TV
services,” he said.
Conversely, a majority of customers in developed pay-TV
markets have said they would be willing to sit through
advertisements before watching TV shows of their choice,
according to a recent IBM survey.
Van den Dam thinks telcos have the upper hand in the
advertising game because of their closer relationships with
and superior knowledge of their customers.
Echoing remarks made by Scott Kriens, the CEO of Juniper
Networks, earlier this week, van den Dam said integrated
telcos can use the data stored in their fixed and mobile
networks to provide a more targeted advertising service to
customers.
“Personalization, localization and control are key assets,” he
said.
Competition or co-existence?
Nevertheless, van den Dam believes Internet TV could
become a greater threat in the future when quality-of-service
issues have been resolved and a converged device has
replaced the TV and PC.
At least one telco represented on the same panel as van
den Dam sees little threat from Internet TV in the immediate
future.
“Internet TV is still not enough,” said Enrico Bagnasco, who
works on the IPTV business of Telecom Italia.
Bagnasco said that when consumers can choose to watch the
same content on the Internet or on a standard TV, the vast
majority choose the TV. He referred to the example of the
recent Live Earth concert, which attracted just 10 million
Internet viewers worldwide compared with 2 billion TV watchers.
But others say the attraction of Internet TV lies in its
interactivity and collation of user-generated content, rather
than its ability to compete on premium TV content.
Daryl Dunbar, the director of portfolio innovation for UK
operator BT, believes Internet TV and IPTV are serving
different needs and are more likely to coexist than compete
in the future.
“The challenge is how we can inter-work with those other
companies,” he said.
Click here for complete coverage of Broadband World Forum Europe.
Corrections have been made to this article: spelling errors
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